The enterprise market will mimic the success of consumer tech companies that competed against incumbents and built very large businesses like Facebook, Twitter and LinkedIn, according to Sabet. “You’re going to see standalone companies that are startups become very large, independent, durable, public companies,” he says. The current incumbents are not going to be the only leaders in the enterprise market, according to Sabet.
Incumbents are not guaranteed leadership
However, technology giants such as Google and Microsoft are making massive investments in the future of work and deliberately positioning their services as a comprehensive set of tools that benefit from scale and interoperability. If businesses are already using G Suite or Office 365 for many core business functions, for example, why would they choose to use a third-party app for collaboration?
Sabet says workers are increasingly comfortable trying new products, downloading new apps and using the best tool for their work. “End users are going to just demand the very best experiences and they’re going to prioritize that over integration from a single company,” he says.
“When you start bloating these products out, where all of a sudden their G Suite product is like the all-singing-all-dancing product … it just feels like maybe it’s not the optimal product for that given use case,” Sabet says. Workers would rather use an app that’s singularly focused on the task or job at hand, he adds.
“We’re really very much in the David vs. Goliath business and we tend to really believe in the David in that story because we feel like smaller startup companies with a singular mission/focus can out-innovate larger companies,” Sabet says. “There are things that big companies can do given their user base, but it’s not obvious to me how they can keep tacking startup ideas onto their existing product line and count on them.”
His read on current market dynamics is mixed. Sabet says Microsoft is better positioned for the enterprise than it’s been in a very long time, but “the idea they’re going to build a Slack competitor is a little bit of the old Microsoft peeking its head out.” He is also impressed with the strides Google and Amazon are making in the enterprise, but he’s less convinced about the prospects for Apple and Facebook. He finds Apple’s enterprise strategy confusing and Workplace by Facebook bearing little impact. “I haven’t seen anything that’s really making me feel like it’s a huge priority for [Facebook],” he says.
How apps for work mimic the rise of social
Sabet and his colleagues at Spark Capital are making investment decisions in the enterprise based on the same characteristics they apply to the consumer space. “We look at things like true engagement, what’s the roadmap for these products, how much are these users counting on these products, is it a critical part of their work?,” Sabet says.
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